aus FB :
This is the latest fro the Hedgies trying to desscribe the Situation right now and I love it to be frankly
Once the Company came out of bankruptcy they made the highly unusual move of considering having a go at a new business; buying companies or starting businesses using a $125 million credit facility, "substantial cash" and advice from the Wall Street private equity company.
Of course this was just an idea until the mammoth press release on December 9 when the Company announced that KKR & Co. L.P. has entered into a conditional commitment letter to make a strategic investment in the Company dated December 8, 2013.
Subject to the completion of definitive documentation, due diligence and the terms and conditions of the Commitment Letter, KKR has agreed (i) to purchase approximately $10.55 million face amount of convertible preferred stock of the Company at a price per share of $1.10 convertible on a one-for-one basis into shares of common stock of the Company, and (ii) commit to purchase up to $150 million aggregate principal amount of subordinated 7.5% PIK notes, which may be issued in one or more tranches over a three year period, each with a seven year term from the date of initial issuance, subject to certain terms and conditions.
Substantially all of the proceeds from the Subordinated Notes, if and when issued, would be used by the Company to fund future acquisitions. Upon consummation of the transactions contemplated by the Commitment Letter, KKR would receive five-year warrants to purchase approximately 61.4 million shares of the Company's common stock, 30.7 million of which would have an exercise price of $1.32 per share and 30.7 million of which would have an exercise price of $1.43 per share. KKR would also have the right for three years to participate up to 50% in equity offerings up to an aggregate of $1 Billion by the Company subject to certain limitations, including a cap in ownership by KKR (and its affiliates) of 42.5% of the Company's common equity.
The Convertible Preferred Stock, if and when issued, will include the right for KKR to appoint one of seven members to the board of directors of the Company. The Commitment Letter terminates on January 31, 2014 in the event that the parties do not enter into definitive documentation on or before such date. The Company has agreed to reimburse KKR for certain expenses incurred by it in connection with the Commitment Letter and has also agreed in certain circumstances to pay KKR a termination fee equal to $2 million.
Michael Willingham, Chairman of the Company said, "We believe this investment from KKR will provide WMI Holdings with a compelling opportunity to create meaningful shareholder value.
Conclusion: WMIH is making a spectacular move up after the massive announcement of the conditional commitment letter to make a strategic investment in the Company by KKR & Co. L.P. Anyone who wants to count WMIH out here should keep in mind that these ex big board stocks that come out of bankruptcy and reorganization have a history of making spectacular and historic runs. One does not have to look much farther then AAMRQ, FNMA or FMCC to know that and there is little doubt that WMIH deserves to be at the top of every speculators watch list.
www.otcmagic.com/...gs-corp-otc-wmih-a-new-penny-stock-is-born